Investigation Reveals Welfare Withdrawals at Bars, Sex Shops, Strip Clubs

A New York Post investigation found that welfare funds and state-provided benefits were cashed at local strip clubs and liquor stores.

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New York state welfare recipients have been withdrawing funds and cashing state-provided benefits at local strip clubs, adult video shops and liquor stores, a New York Post investigation has found.

The newspaper pored through eighteen months of records from the state of New York’s Electronic Benefits Transfer (EBT) program from 2011 and 2012, accessed via a Freedom of Information Act request. The 200 million records they received revealed some unexpected, rather tawdry places at which welfare recipients claimed their cash.

Some New Yorkers used their state-issued debit cards at establishments like Club 11 and Club Heat, two strip clubs in the Bronx. At least three withdrawals of $120 or more were made at an ATM inside the Blue Door Video shop in the East Village, which primarily sells adult movies. A popular dive bar in Brooklyn named Hank’s Saloon dispensed similar amounts.

(MORE: Who Should Still Be On Welfare?)

The Supplemental Nutrition Assistance Program, better known as SNAP, provides around $200 each month to lower income New Yorkers (a family of four receives $668 a month). The benefits are provided in the form of electronic funds on a state-provided debit card as part of the EBT program, intended to be used at sanctioned retailers.

Alcohol and tobacco are banned under the food stamp program, but cash benefits have less oversight. That program also offers a slightly-reduced funding plan, ranging from $158 to $433 for a family of four, intended to be used as temporary assistance for paying rent and energy bills.

The locations the Post takes issue with aren’t exactly secret – in fact, many of them, including adult video shops and strip clubs, are distinctly listed on the Office of Temporary and Disability Assistance website as participating ATMs.

(MORE: Welfare Reform: The Vicious Cycle)

But the paper seems to take most offense with the blatant nature of some of the transactions, noting that non-eyebrow-raising ATMs are very nearby most of the controversial locations. They report:

The Boiler Room, a gay dive bar in the East Village, had $120 and $60 transactions a minute apart on Jan. 17, 2011. The bar is around the corner from a Bank of America that takes EBT cards.

Certainly, the Post investigation isn’t meant to imply that every person who used the ATMs at these locations went back and funded a purchase at the store. But the proximity is a reminder that once money is extracted from an EBT account, the state has no control over where it’s spent.

The Post’s Sunday cover played to the adult nightlife aspect of the scandal. “$weet Charity,” the bubble-lettered headline read, alongside a racy image of a stripper.

Click here to see the Post infographic detailing the surprising places New Yorkers have claimed their welfare funds.